India consults on mergers; disagrees on industry ‘health’

The Telecom Regulatory Authority of India is seeking views from stakeholders on identifying obstacles in the current regulations hindering mergers and acquisitions in the telecoms sector, along with those complicating allotment, sharing and trading of airwaves, reports the Economic Times. The regulator has unveiled a wide-ranging discussion paper that aims to make regulatory and business environment more comfortable for companies in the sector by simplifying rules. “Promoting ease of doing business is among the priority work items for unhindered growth of the telecoms sector, and it is important to identify bottlenecks, obstacles or hindrances that are making it difficult to do telecoms business in India, and thus require regulatory intervention,” Trai said in the paper. Meanwhile, the telecom regulator “has cited lack of reforms, and not promotional offers as suggested by the Department of Telecommunications (DoT), for the weakening health of the industry, triggering a blame game between the two sides on the state of affairs at what was once the showpiece sector of the Indian economy.” “The regulator has, over a period of time, written several recommendations to the DoT, suggesting reforms such as reduction in licence fees and the universal services obligation fund, relaxing payment for auctions, so on and so forth,” a senior official at Trai said. The Telecom Commission, the highest decision-making body in DoT, wrote to the regulator saying that its decision to allow Reliance Jio Infocomm to offer free services beyond the 90-day period permitted for promotional tariff plans had affected the sector’s revenue. This in turn could jeopardise banks that have lent to telecom companies, payments to the government for spectrum and orderly growth of the telecom sector, the commission had warned. Trai, however, believes it is non-implementation of its suggestions such as making spectrum usage charge uniform at 3% of annual revenue and reducing it gradually to 1%, lowering licence fees to 6% from 8% and limiting mandatory contribution from telecoms operators to the universal services obligation fund to 1% from the current 5% that are among the chief reasons for the flagging health of the industry. Read more and here.

Friday, 17 March 2017

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